Technology and Competitiveness: The New Policy Frontier

B.R. Inman and Daniel F. Burton, Jr.

From Foreign Affairs, Spring 1990

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Summary:  Reviews (1) the decline of US technological superiority in consumer electronics, semiconductors and superconductors (2) the technology transfer issues raised by the US-Japanese negotiations on the FSX fighter aircraft programme (3) US debate about whether HDTV (high-definition television) market potential is sufficient to warrant US investment as a player (4) currents of thought in other countries facing analogous science and technology policy issues (5) possible measures for strengthening the US manufacturing base and for sharpening US technology policy management. Asserts that the emergence of technological competitiveness as a matter of prime US strategic economic concern, and its extension into the centre of US foreign policy-making, require 'institutional realignments' in Washington.

Admiral B. R. Inman retired from public service in 1982 and has subsequently been active in a variety of efforts to revitalize U.S. industrial competitiveness. He is a member of the Executive Committee of the Council on Competitiveness. Daniel F. Burton, Jr., is Executive Vice President of the Council on Competitiveness.

International competition has eroded the once commanding U.S. advantage in technology. It has caused a shift in government and business relationships in the United States and raised fundamental questions about the conduct of American foreign policy. Both the public and private sectors are increasingly concerned with a new set of technological issues related to industrial competitiveness. This concern has forced a reassessment of national priorities and caused both industry and government to rethink their traditional roles in the development and application of technology. The implications for foreign policy stem from one overriding fact: when it comes to advanced technology, national security can no longer be viewed in purely military terms; economic security is also a vital consideration. Moreover, just as it is increasingly difficult to make a meaningful policy distinction between military and commercial technologies, so is it difficult to determine how to manage international relationships, since important political allies in military technology are often hard-nosed economic competitors in commercial technology.

As a result of these trends a new U.S. public policy framework is emerging that focuses on industrial competitiveness and technology. This focus raises some important issues about the evolving roles of business and government in the economy, and forces new thinking about how U.S. foreign policy can accommodate strategic economic concerns.

II

Recent policy debates reflect the concern with the erosion of U.S. technological superiority and shifting business and government interests. In many ways the debate about the proper policy for technology mirrors the debate about the proper role of government in the economy. Should the government intervene to assist certain sectors? If so, what form should government intervention take? Which sectors should receive public assistance? How should government policies and institutions be structured to facilitate commercial technology? Recent technological developments have highlighted questions such as these and generated a lively policy debate, pitting traditional notions about the proper role of government against the need for prompt, pragmatic policy responses. The answers to these questions and the implications for U.S. foreign policy are only beginning to be understood. Indeed some observers have complained that Washington suffers from a "technology of the week" syndrome, in which such diverse technologies as cold fusion, supercomputers and biotechnology emerge unexpectedly as burning issues and stir tremendous policy debates, only to be forgotten in a few weeks.

Five technological debates profile the changing public policy dialogue: consumer electronics, semiconductors, superconductors, the FSX fighter airplane and high-definition television (HDTV). These debates do not include all of the technologies that have engaged the federal government in recent years, but they are indicative of the kinds of issues that are driving public policy deliberations.

Consumer Electronics

The decline of the American consumer electronics industry was one of the early signals that the United States was facing a challenge to its technological leadership. For most of the past century American industry enjoyed a strong position in consumer electronics. During the past fifteen years, however, U.S. companies have ceded that market to foreign competitors. The American era ...

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